Home Buying

What Is a Home Equity Loan?

A home equity loan is a lump-sum loan secured by the equity in a home, repaid in fixed installments, usually at a fixed interest rate. It is often called a second mortgage because it sits behind the first mortgage. Because the home is collateral, missed payments can lead to foreclosure.

Borrowing Limit

Lenders usually limit total borrowing so that the first mortgage plus the new loan stays below a set share of the home's value, often around 80%–85%.

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Put Home Equity Loan into practice with these free calculators — no sign-up, nothing stored.

🔑 Home Equity Calculator Find your current home equity and estimated borrowing capacity. Calculate → 💳 Loan Calculator (EMI) Works for any loan type — find your monthly payment and total interest. Calculate →

🔗 Related Terms

Home Equity Home Equity Line of Credit (HELOC) Cash-Out Refinance Collateral

More Home Buying Terms

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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.